often angry. always gen x.

the tax debate. bring your excedrin.

Math & economics make my head hurt. Probably not unrelated to the reason I became an English major. But at least I gots me my critical thinking skills. Actually, the topic’s interesting when one can explore the various greater forces at play, but the sniping about it does bring on a headache. Currently suffering through the latest freakonomics discussion over at the NYT. The article is fine, though it raises more questions than it answers; it’s the comments wading that ups the irritation factor. I’ll put the chart that works for me most here, and include a few of the (I thought) most cogent comments (you can go find your own favourites; they’ve no doubt multiplied greatly just in the time I put this together). Must say, I truly appreciate the number-cruncher commenters who clearly know their stuff.

Praise be to one reader who cut through the crap to discuss the current spread of the tax burden:

When all taxes are factored in to find “effective” tax rates, including local, state, payroll, and federal taxes, there isn’t much difference between the tax burdens of various income groups. It breaks down as follows:

And another, who I appreciated for debunking the earlier hysteric comment quoted here:

“Why is no one discussing the very real possibility that exists under the Obama tax plan: the migration of the rich, entrepreneurial, wealthy to another country? ”

Perhaps because England, Sweden, Denmark, Germany, Japan, etc all have higher tax rates than the US, and those “high tax” countries are the only ones that provide the educational and economic infrastructures which allow the rich to get richer.

The only people who are going to flee the United States with their money for low tax havens are those who have no desire to invest their money in high value productive enterprise, aka inherited wealth and stolen wealth.

Not surprisingly, there was a lot of bickering back & forth between those who thought taxing the rich more was okay and those who railed at it as “robin hoodism.” Thanks to those readers who countered the outrage by factoring in the percentage of national earnings, not just tax burden, of that top one percentile (about 34%).

“Capitalism is great at creating wealth, but not so good at distributing it” — Warren Buffet. “Most rich CEO’s pay a lower TOTAL tax rate (incl. pay roll, SS, etc.) than their secretaries” — also Warren Buffet. If you control 34% of the wealth of the nation, then you should pay 34% of the tax burden of the nation. So the 20% paid by top 0.1% seems like a pretty good deal. Make the tax system fair and INCREASE taxes on the top earners. There is no better system than America for generating wealth and this hasn’t changed for the last 40 years (or more) regardless of tax code changes. In short, our rich have no better place to go — not even a close second …

And a missing link?

These comparisons exclude a crucial piece of information: the overall COST of each of these plans.

According to the Tax Policy Center: Assuming Bush tax cuts are renewed, Obama’s plan would bring in an additional $700 billion in taxes over the next 10 years, while McCain’s would cost the Treasury $600 billion. Assuming legislators would have let the tax breaks expire, Obama’s plan would cost the U.S. Treasury $2.7 trillion and McCain’s $3.7 trillion.

So, when folks compare how they would do based on their own income, they ought to consider that McCain’s plan would leave the country in the hole by an additional $1 trillion, which would need to be covered by program cuts or other tax increases.

Tip of the iceberg here, I know. Not pretending to be comprehensive. I will freely admit how galled I am by the widening gap between the richest and everyone else in this country. So I’m “fair and balanced” in that Fox News sort of way, just from the other direction. But given that McCain’s avoiding a debate on the issues, thought I’d try to direct some focus onto the stuff that’s really going to impact us.